Prediction For Oil Gas 2015

Topics: Petroleum, Light crude oil, OPEC Pages: 11 (1000 words) Published: January 28, 2015
Jan 2015

Oil & Gas IQ | 2015 Predictions

From continuing civil strife in the Cradle of Civilisation and the emergence of a terrorist-led pretender state in the Fertile Crescent, to a conflict in Central Europe that shows no sign of abating: nobody could say that the fourteenth year of the 21st century passed into history without event.

Oil prices have been slashed by more than half over a six month period, and we see warnings of dire economic hardship in the months ahead as the Eurozone slips into a deflationary funk, and even the Chinese dragon is left to brood on lower than expected growth.

As 2015 dawns we’d like to indulge in a spot of informed guessing, with a side order of crystal ball-gazing and try to predict some of the trends that we think will form our industry this calendar year.

It is always a tricky business to try and presage the shape of things to come, and as we stare into the aether of events yet to unfold, I certainly hope that our efforts are misbegotten in more than one instance... Agree, disagree or have anything to add to these predictions?

Let us know at

Oil & Gas IQ | 2015 Predictions

The price of Brent crude oil has plummeted by 45 per cent in recent months and there are no indications that an uptick will be on the cards in the first two quarters of 2015.
Lessened demand in the Eurozone and a slowing Chinese economy, combined with oversupply in the USA and the proclivities of an OPEC that will benefit in the long run from a cut-price crude, are all inhibitors to a rebound in the price of Black Gold.

Analysts have mooted that oil could sink as low as $40 per barrel in the first half of 2015, which would have severe consequences for the global economy.
Oil & Gas IQ | 2015 Predictions

In South America, the continent’s largest holder of hydrocarbon reserves, The Bolivarian Republic of Venezuela, is braced to default on its debt.
The country depends on oil to fulfil 95 per cent of its export revenue, and needs crude at least $97 a barrel to meet its fiscal obligations through 2038.
The OPEC member is currently suffering the world’s highest rate of inflation and has been rationing food sales since October 2014.

Oil & Gas IQ | 2015 Predictions

Lower oil prices have already seen big movements in mergers and acquisitions - the prime example of which was the Q4 2014 purchase of Baker Hughes by Halliburton for $34.6 billion.

Lower oil prices will doubtless see smaller to mid-size outfits either put out to pasture or cannibalised - especially those involved in more the more costly aspects of oil and gas extraction, such as heavy oil and high pressure high temperature projects.

Of course, mergers usually entrain redundancies, so expect employee numbers to fall concomitant to takeover announcements. A recent report suggested that the economic malaise may drive one in three UK oil and gas firms into bankruptcy.

Oil & Gas IQ | 2015 Predictions

A continued sub $100 per barrel oil price, combined with sanctions meted out by Western powers over the Ukraine crisis will mean that the Russia Federation slides into a deep recession in 2015.
Russia derives some 40 per cent of its revenue from hydrocarbon activities and 2014 already saw the former superpower’s economy contract to the level of a mid-size European player like Spain.

Oil & Gas IQ | 2015 Predictions

This year we will likely see a stand off in the Mediterranean centred on disputed natural gas reserves in the Aegean and Levant.
Fractious relations between cash-strapped Greece and Turkey and Lebanon and Israel could be further be inflamed when trillions of cubic feet of natural gas and tens of billions of barrels of untapped oil reserves are thrown into the mix.

Expect a more Westernised and...
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